8 Tax Savings Strategies Every Healthcare Entrepreneur Should Know

Navigating the complex landscape of healthcare is already challenging, and when mixed with complicated business tax filing it can be a real headache. Whether you’re a physician, dentist, therapist, or practice owner, understanding how to strategically reduce your tax liability is essential to maximizing your income and growing your practice. Partnering with a tax firm, such as Visibility, who specialize in taxes for healthcare providers and entrepreneurs can remove that headache and ensure no money is being left on the table come tax time.

It is also important to note that tax laws change frequently, and what was optimal two years ago may not be today. Your Visibility Team stays well informed of changes as they occur so that we can make sure our tax planning is as compliant and effective as possible!

Here are some examples of tax planning and financial strategies we have been successfully implementing with our healthcare professional clients this year:

Identifying the Correct Entity Setup For Your Practice

Entity structure is an important place to start! The Visibility team has extensive experience assisting clients in setting up the ideal entity structure for their unique needs. 

Forming an S Corporation or Professional Corporation (PC) may allow you to split income into salary and dividends, potentially reducing self-employment taxes. With careful planning, providers can pay themselves a “reasonable salary” and take additional profits as distributions, which are not subject to payroll taxes. To learn more about the entity options that are available to entrepreneurs read here: Maximizing Tax Benefits Through Retirement Contributions

Retirement Contributions

There are several retirement plan options that could work well for healthcare entrepreneurs. We help clients identify the plan type that aligns with personal goals, offers as much flexibility as possible and allows for the best tax benefits. Some examples of plans that work well for healthcare entrepreneurs are SEP IRA or Solo 401(k) plans, which are great for self-employed providers or small practices. Defined Benefit Plans can also be a great option, allowing for tax deferral on large contributions that work well for high-income professionals.

To learn more about tax strategies for retirement contributions read here: Retirement Contributions Guide

Identifying and leveraging available tax credits and deductions

There may be tax deductions or credits available to you or your business.. We help clients identify those opportunities! One example of such a deduction that is specific to healthcare entrepreneurs is the Qualified Business Income (QBI) Deduction.

Qualified Business Income (QBI) Deduction

Under Section 199A of the Tax Cuts and Jobs Act, eligible healthcare providers operating as sole proprietors, partnerships, or S-corporations may qualify for up to a 20% deduction on qualified business income. There are income thresholds and limitations we are well versed in, especially for “specified service trades or businesses” (which includes healthcare). With proper planning—such as income splitting or adjusting business structure—your Visibility team can help you know if you qualify and how to maximize this deduction.

To learn more about some of the available tax credits you may be eligible for, read here: Unlock Your Savings

Business Expense Deductions/Accountable Plans

Similarly, many healthcare providers leave money on the table at tax time simply due to poor recordkeeping or a lack of awareness of business deductions available. Key deductible expenses include:

• Continuing medical education (CME) and certifications

• Licensing and malpractice insurance

• Medical supplies and office equipment

• Travel and meals related to conferences

• Professional memberships and journals

Using a dedicated business credit card and accounting software to track these expenses systematically can help, but it is not always all that is required. It is also critical to compliance that you have an Accountable Plan in place if reimbursing individuals personal accounts for the deductions. Your Visibility Team will provide tools and insight to make sure your records are accurate, comprehensive and compliant. To learn more about some of the business deductions available to sole proprietors read here: Top Deductions and Credits for Sole Proprietors

Take Advantage of Section 179 and Bonus Depreciation

If you purchase equipment, technology, or furniture for your practice, you may be able to deduct the full cost in the year it was placed in service through Section 179 or bonus depreciation. This can significantly lower your taxable income, especially in high-revenue years.

To learn more about Section 179/Bonus Depreciation read here: Maximizing Tax Savings with Section 179

Leveraging Real Estate Investing

Purchasing the building where your practice operates can offer multiple benefits:

• Rent paid to your real estate holding entity is deductible for the practice.

• You gain depreciation deductions and potential property appreciation.

• Certain costs, such as improvements or renovations, may be capitalized and depreciated over time.

Additionally, a cost segregation study may be a great partner strategy to this to accelerate depreciation and enhance your tax deferral!

Utilizing a Health Savings Account (HSA)

An HSA is a great tax-advantaged tool for our healthcare professionals to take advantage of! Contributions are tax-deductible, growth in the account is tax-free, and withdrawals are not taxed when used for qualified medical expenses.

In 2025, individuals can contribute up to $4,300 and families up to $8,550, with an additional $1,000 catch-up for those over 55. To learn more read here: IRS HSA Publication

Hiring Family Members

If you own your practice, hiring a spouse or child to work in the business can create tax-saving opportunities. Wages paid to them are deductible by the business, and children under 18 employed by a sole proprietorship or partnership may not be subject to payroll taxes. In addition, income paid to them can be contributed to a Roth IRA, starting their retirement savings early.

How Can we help?

Tax planning is not a one-size-fits-all situation. Healthcare professionals face unique regulatory, income, and expense patterns that general tax advice may not fully address. They also have unique opportunities for tax savings that can be missed. Partnering with an advisor, such as Visibility, who specializes in tax planning for healthcare professionals ensures you take advantage of every available opportunity while staying compliant. Your Visibility Team will provide financial clarity and actionable insights, proactive strategies and detailed financial guidance customized to your goals so that you can focus on what you do best.

Schedule a Discovery Call with us today to learn more!